SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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forth the amount on which the filing fee is calculated and state
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{ } Check box if any part of the fee is offset as provided by
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<PAGE>
March 16, 1998
Dear Shareholder:
We are pleased to enclose your Notice of Annual
Meeting and Proxy Statement for the Annual Meeting of
Shareholders of S&T Bancorp, Inc. ("S&T") to be held
on April 20, 1998, at 10:00 a.m., Eastern Standard
Time, at the S&T Training and Support Center, located
at 355 North Fifth Street, Indiana, Pennsylvania.
At the Annual Meeting, you will be asked to elect six
directors of S&T to serve terms expiring in 2001, to
approve an amendment to S&T's Articles of
Incorporation to increase the number of shares of
S&T's authorized Common Stock from 25,000,000 shares
to 50,000,000 shares and to ratify the appointment of
the independent auditors of S&T.
In order to make sure that your vote is represented at
the Annual Meeting, indicate your vote on the enclosed
proxy form, sign, date and return it in the enclosed
envelope. If you attend the Annual Meeting in person,
you may revoke your proxy at the Annual Meeting and
vote in person.
Sincerely,
James C. Miller
President and
Chief Executive Officer
<PAGE>
S&T Bancorp, Inc.
800 Philadelphia Street
Indiana, Pennsylvania 15701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 20, 1998
To the Shareholders of
S&T Bancorp, Inc.:
Notice is hereby given that the Annual Meeting of
Shareholders of S&T Bancorp, Inc. ("S&T") will be held
at the S&T Training and Support Center, located at 355
North Fifth Street, Indiana, Pennsylvania 15701, on
April 20, 1998 at 10:00 a.m. Eastern Standard Time,
for the following purposes:
1. To elect six directors of S&T to serve terms
expiring in 2001;
2. To consider the approval of an amendment to S&T's
Articles of Incorporation to increase the number of
authorized shares of S&T Common Stock, par value
$2.50 per share, from 25,000,000 shares to 50,000,000
shares;
3. To ratify the appointment of Ernst & Young LLP as
independent auditors of S&T for calendar year 1998,
and;
4. To transact such other business as may properly
come before the meeting or any adjournment thereof.
Only shareholders of record at the close of business
on March 2, 1998 are entitled to notice of and to vote
at such meeting or any adjournment thereof.
By Order of the Board of Directors,
James G. Barone
Secretary
Indiana, Pennsylvania
March 16, 1998
IMPORTANT
YOUR VOTE IS IMPORTANT. IN ORDER TO ASSURE YOUR
REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY AS SOON AS
POSSIBLE IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED FOR MAILING IN THE UNITED STATES. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE ELECTION AS DIRECTORS OF THE
NOMINEES NAMED HEREIN, TO APPROVE THE AMENDMENT TO
S&T's ARTICLES OF INCORPORATION AND FOR THE
RATIFICATION OF THE APPOINTMENT OF S&T's AUDITORS.
<PAGE>
S&T BANCORP, INC.
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 1998
INTRODUCTION
This Proxy Statement is being furnished to
shareholders of S&T Bancorp, Inc. ("S&T") in
connection with the solicitation of proxies by the
Board of Directors of S&T (the "S&T Board") for use at
the Annual Meeting of Shareholders, and any
adjournments thereof, to be held at the time and place
set forth in the accompanying notice ("Annual
Meeting"). It is anticipated that the mailing of this
Proxy Statement and the enclosed proxy card will
commence on or about March 16, 1998.
At the Annual Meeting, shareholders of S&T will be
asked to elect six directors of S&T to serve terms
expiring in 2001, to approve an amendment to S&T's
Articles of Incorporation to increase the number of
authorized shares of S&T Common Stock, par value $2.50
per share, from 25,000,000 shares to 50,000,000 shares
and to ratify the appointment of S&T's auditors, Ernst
& Young LLP, for 1998.
All shareholders are urged to read this Proxy
Statement carefully and in its entirety.
MEETING INFORMATION
Date, Place and Time
The Annual Meeting of Shareholders of S&T will be held
on April 20, 1998 at 10:00 a.m., Eastern Standard
Time, at the S&T Training and Support Center, located
at 355 North Fifth Street, Indiana, Pennsylvania.
Record Date; Voting Rights
The securities which can be voted at the S&T Annual
Meeting consist of shares of S&T Common Stock, with
each share entitling its owner to one vote on all
matters. Only holders of record of S&T Common Stock at
the close of business on March 2, 1998 (the "Record
Date") will be entitled to notice of and to vote at
the Annual Meeting. There were __________ record
holders of outstanding S&T Common Stock and __________
shares of S&T Common Stock outstanding as of the
Record Date.
A quorum is required for the transaction of business
at the Annual Meeting. A quorum is constituted by the
presence, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes
which all shareholders are entitled to cast on the
particular matters to be voted on. At a duly organized
Annual Meeting, each matter shall be decided by a
majority of the votes cast on such matters by the
shareholders present at the meeting in person or by
proxy. Votes withheld from director nominees and
abstentions will be counted in determining whether a
quorum has been reached, but failure to execute and
return a proxy will result in a shareholder not being
considered present at the meeting.
Under Pennsylvania law, the act of "voting" does not
include either recording the fact of abstention or
failing to vote for a candidate or for approval or
disapproval of a proposal, whether or not the person
entitled to vote characterizes the conduct as voting.
In other words, only those who indicate an affirmative
or negative decision on a matter are treated as
voting, so that an abstention or failure to vote is
not equivalent to a negative decision.
With respect to Proposal 1, the six nominees for
election as directors who receive the greatest number
of votes cast at the Annual Meeting shall be elected
as directors at the conclusion of vote tabulation. A
withheld vote on any nominee will not affect the
voting results.
With respect to Proposals 2 and 3, each will be
decided by a majority of the votes cast by the
shareholders present at the meeting in person or by
proxy. Shares which are present at the Annual Meeting,
but not voted, will not be counted as votes cast and
therefore will have no effect on the vote on Proposals
2 and 3.
Broker-dealers who hold shares on behalf of their
customers in street name may vote, in their
discretion, on "routine" items on behalf of any
customers who do not furnish voting instructions prior
to the Annual Meeting. With respect to non-routine
items that come before the Annual Meeting for a vote,
such broker-dealers would not be able to vote without
first receiving voting instructions for their
customers. Although S&T believes that the proposals to
be considered by the shareholders are routine, if
there were broker "non-votes" (arising from the lack
of required instructions from beneficial owners) such
non votes would not be considered in the calculation
of the majority of the votes cast and therefore would
have no effect on the vote with respect to a
non-routine item.
<PAGE>
Voting and Revocation of Proxies
If the appropriate enclosed form of proxy is properly
executed and returned to S&T in time to be voted at
the Annual Meeting, the shares represented thereby
will be voted in accordance with the instructions
marked thereon. Executed but unmarked proxies will be
voted "FOR" the nominees proposed by the S&T Board and
"FOR" the proposals presented in the attached Notice
of Annual Meeting of Shareholders. Except for
procedural matters incident to the conduct of the
Annual Meeting, S&T does not know of any matters other
than those described in the Notice of Annual Meeting
that are to come before the Annual Meeting. If any
other matters are properly brought before the Annual
Meeting, the persons named in the accompanying proxy
will vote the shares represented by the proxies on
such matters as determined by a majority of the S&T
Board.
The presence of a shareholder at the Annual Meeting
will not automatically revoke such shareholder's
proxy. However, shareholders may revoke a proxy at any
time prior to its exercise by filing with the
Secretary of S&T a written notice of revocation, by
delivering to S&T a duly executed proxy bearing a
later date or by attending the Annual Meeting and
voting in person.
Solicitation of Proxies
The cost of soliciting proxies in the form enclosed
herewith will be borne by S&T. In addition to the
solicitation of proxies by mail, S&T, through its
directors, officers and regular employees, may also
solicit proxies personally or by telephone. S&T also
will request persons, firms and corporations holding
shares of S&T Common Stock in their names or in the
name of their nominees, which are beneficially owned
by others, to send proxy material to and obtain
proxies from the beneficial owners and will reimburse
the holders for their reasonable expenses in so doing.
PRINCIPAL BENEFICIAL OWNERS OF S&T COMMON STOCK
As of December 31, 1997, the Trust Department of S&T
Bank held, in various fiduciary capacities, 1,871,850
shares of S&T Common Stock. These holdings represent
13.2% of the total outstanding shares. The Trust
Department has sole voting power for 1,127,762 of
these shares and no voting power for 744,088 of these
shares. It is the intention of management to vote the
shares for which it has sole voting power "FOR" the
matters to be acted upon at the Annual Meeting. S&T is
not aware of any other person who beneficially owns
more than five percent of any class of securities of
S&T.
<PAGE>
BENEFICIAL OWNERSHIP OF S&T COMMON STOCK BY DIRECTORS AND
OFFICERS
The following table sets forth, as of December 31,
1997, the amount and percentage of S&T Common Stock
beneficially owned by each director, each nominee for
director, named Executive Officers of S&T and
directors and Executive Officers of S&T Bank as a
group.
Number of Shares of Common Stock Beneficially Owned
<TABLE>
<CAPTION>
Directors, Executive Direct Indirect(A) Stock Options(B) Percentage of
Officers and Nominees* Shares of S&T
Common Stock
Owned
<S> <C> <C> <C>
James G. Barone 5,086 36,000 0.29
Thomas A. Brice* 28,699 19,899 7,500 0.40
Forrest L. Brubaker 31,121 7,500 0.27
James L. Carino* 72,383 20,432 7,500 0.71
John J. Delaney 12,920 19,116 7,500 0.28
Robert D. Duggan 19,822 4,961 94,000 0.84
Thomas W. Garges, Jr.* 1,460 7,500 0.06
William J. Gatti 9,640 1,400 7,500 0.13
Ruth M. Grant 104,448 0.74
Jeffrey D. Grube* 1,006 0.01
Herbert L. Hanna 62,720 62,720 7,500 0.94
Frank W. Jones 8,557 0.06
Joseph A. Kirk* 16,768 2,043 7,500 0.19
David L. Krieger 7,299 36,000 0.31
Samuel Levy 9,588 57,554 7,500 0.53
James C. Miller* 9,837 9,706 60,000 0.56
Alan Papernick 1,000 0.01
W. Parker Ruddock 24,280 7,500 0.22
Bruce W. Salome 4,908 36,000 0.29
Myles D. Sampson 3,643 0.03
Charles A. Spadafora 17,884 8,013 7,500 0.24
Christine J. Toretti 15,892 88,901 7,500 0.79
Directors and Executive 490,601 295,129 465,000 8.84
Officers as a group
(A) May include shares held by spouse, other family members,
as trustee or through a corporation. The reporting person
may disclaim beneficial ownership of such shares.
(B) Includes nonstatutory stock options vesting within 60
days of the date this Proxy Statement is mailed.
</TABLE>
<PAGE>
PROPOSAL I---ELECTION OF DIRECTORS
General
The bylaws of S&T (the "S&T Bylaws") provide that the
number of directors constituting the S&T Board shall
consist of not less than twelve nor more than
twenty-five. Currently, there are nineteen directors
on the S&T Board. The Articles of Incorporation of S&T
provide for the classification of directors into three
classes, as nearly equal in number as possible, with
approximately one third of the directors elected
annually for three year terms. Certain information
about the Nominees (Class 2 Directors), whose terms
will expire in 1998, and who are presently members of
the S&T Board and the S&T Bank Board, is set forth
below:
<TABLE>
<CAPTION>
Name Age Principal Occupation During Past 5 Years Director
Since
<S> <C> <C> <C>
Thomas A. Brice(1)(3) 57 General Manager, Douds, Inc. - Retail 1980
Home Furnishings
James L. Carino(1) 65 President, J.L. Carino Nurseries, Inc. 1987
Thomas W. Garges, Jr. 58 President and Chief and Chief Executive 1990
(1)(3)(4) Officer, Rochester & Pittsburgh Coal Company
Jeffrey D. Grube(2) 44 President, BFG Electroplating and 1997
Manufacturing Company
Joseph A. Kirk(2) 58 President, Beaver Meadow Creamery, Inc. 1993
James C. Miller(1) 52 President and Chief Executive Officer 1993
of S&T
</TABLE>
Certain information about the directors whose terms
continue (Class 3 and Class 1 Directors), who are
directors of S&T and S&T Bank, is set forth below:
Class 3 Directors Whose Terms Expire in 1999:
<TABLE>
<CAPTION>
Name Age Principal Occupation During Past 5 Years Director
Since
<S> <C> <C> <C>
Robert D. Duggan(1) 65 Chairman of S&T, Previously Chief 1981
Executive Officer of S&T and S&T Bank
William J. Gatti 56 President and Chief Executive Officer, 1993
Gatti Medical Supply
Ruth M. Grant(1) 66 President, Louis A. Grant, Inc. - 1997
Specialized Equipment Manufacturing
and Services
Herbert L. Hanna(1)(2)68 Physician 1986
Samuel Levy(1)(3) 59 President, Jefferson Wholesale Grocery 1977
Company, Inc.
Charles A. Spadafora 56 President, Colonial Motor Mart 1987
</TABLE>
<TABLE>
<CAPTION>
Class 1 Directors Whose Terms Expire in 2000:
Name Age Principal Occupation During Past 5 Years Director
Since
<S> <C> <C>
Forrest L. Brubaker 70 Retired, Formerly Chairman of the 1987
(1)(5) S&T and S&T Bank Board
John J. Delaney(2) 56 President, Delaney Chevrolet, Geo, 1987
Buick, Honda
Frank W. Jones(2) 52 Attorney at Law 1997
Alan Papernick 60 Attorney at Law 1997
W. Parker Ruddock(1)(3)69 Judge of the Court of Common Pleas 1977
of Indiana County, Pennsylvania
Myles D. Sampson(2) 53 President, Rimco Properties, Inc. - 1997
Real Estate Development
Christine J. Toretti 41 President, S. W. Jack
(1)(2)(3) Drilling Company and Partner, C&N 1987
Company, Gas Drillers and Producers
</TABLE>
<PAGE>
Notes to Listing of Directors on Page 4
(1) Members of the Executive Committee of S&T Bank and
S&T. The committee, which is appointed annually by
the S&T Board, has authority to take action between
meetings of the S&T Board with respect to matters
which a majority of the committee considers necessary
to be addressed prior to the next meeting of the S&T
Board. The committee had three meetings during 1997.
(2) Members of the Audit Committee of S&T Bank and
S&T. The Audit Committee had two meetings during 1997.
The committee reviews the internal audit activities of
S&T Bank and also supervises and directs the
activities of S&T's independent auditors. Another
function of the committee is to recommend the services
of a reputable certified public accounting firm to
perform the annual audit. The committee receives and
reviews reports of auditors and examiners and presents
them to the S&T Board with comments and
recommendations.
(3) Members of the Compensation and Benefits Committee
of S&T Bank and S&T. The committee's function is to
recommend to the S&T Board action on compensation and
benefit changes brought to it by management. The
committee had four meetings during 1997.
(4) Mr. Garges is also a director of Rochester &
Pittsburgh Coal Company.
(5) The S&T Bylaws require mandatory director
retirement at the Annual Meeting following the 70th
birthday of the director. As such, Director Brubaker
will retire from the S&T Board at the Annual Meeting.
The S&T Board currently anticipates that it will
reduce the size of the S&T Board by one member
immediately following the Annual Meeting.
The S&T Board does not have a nominating committee.
During 1997, the S&T Board held twelve meetings. All
directors except Director Hanna attended at least 75%
of the total number of meetings of the S&T Board and
committees.
S&T Board Fees
Non-employee members of the S&T Board are compensated
at the rate of $5,000 per year plus $700 per meeting
attended, effective January 1, 1998. Directors are
paid $200 to $250 for attendance at S&T Board
committee meetings. In December 1997, each member of
the S&T Board who was not an employee of S&T was
granted an option to acquire up to 2,500 shares of S&T
Common Stock at an exercise price of $40.75 per share,
the market price on the date of the grant. These
options are exercisable after six months and within
ten years of the date of the grant.
<PAGE>
Retirement Plan
The S&T Bank Retirement Plan ("Retirement Plan")
covers all eligible employees and provides a monthly
retirement income for employees and their spouses.
The following table shows the estimated annual benefit
payable upon a normal retirement date to persons in
specified remuneration and years of service
classifications for the Retirement Plan. This benefit
is payable in addition to social security and is
calculated based upon the participant's average annual
regular earnings for the highest five consecutive
years in the last ten years ("Average Covered
Compensation").
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Years of service
Remuneration 10 15 20 25 30
<C> <C> <C> <C> <C> <C>
$100,000 $13,444 $20,165 $26,887 $33,609 $40,333
150,000 20,944 31,415 41,887 52,359 62,831
200,000 28,444 42,665 56,887 71,109 85,331
250,000 35,944 53,915 71,887 89,859 107,831
300,000 43,444 65,165 86,887 108,609 130,331
350,000 50,944 76,415 101,887 127,359 152,831
400,000 58,444 87,665 116,887 146,109 175,331
450,000 65,944 98,915 131,887 164,859 197,831
</TABLE>
As of December 31, 1997, completed years of credited
service and Average Covered Compensation for Executive
Officers is as follows:
<TABLE>
<CAPTION>
Name Years of Credited Service Average Covered Compensation
<S> <C> <C>
R.D. Duggan(1) 17 $347,639
J.C. Miller 26 218,046
D.L. Krieger 13 153,533
J.G. Barone 5 135,300
B.W. Salome 6 134,760
</TABLE>
(1) See also "---Agreements with Executive Officers"
for discussion of additional retirement arrangements
for Mr. Duggan.
S&T Bank also maintains a Profit Sharing/Employee
Stock Ownership Plan ("ESOP") with 401(k) provisions
in which all employees may participate with elective
salary deferrals. On December 30, 1988, the ESOP
acquired 280,000 shares of S&T Common Stock which are
being allocated to employee accounts over a seven to
ten year period. In 1997, S&T Bank made monthly
matching contributions equal to 50% of the employees'
401(k) contributions, up to 3% of the eligible
participants' compensation. In addition, a 6% year end
contribution was made by S&T Bank. Year end
contributions are based on the performance of S&T,
indexed to earnings per share, and are expected to
range from 2% to 6%.
Effective January 1, 1994, federal tax laws lowered
the amount of annual compensation that may be
considered in calculating benefits payable from
qualified retirement plans to a current maximum of
$160,000. In addition, 401(k) contributions by
employees are restricted by "highly compensated
employee" formulas. In order that S&T Bank officers
not lose benefits they would normally have been
entitled to receive, non-qualified plans were approved
to accumulate the benefits which would have accrued in
the Retirement Plan and Profit Sharing/ESOP Plan were
it not for the impact of the eligible compensation
restrictions. The nonqualified plan related to
retirement benefits is unfunded; the nonqualified plan
related to Profit Sharing/ESOP is funded.
Other benefits generally provided to all officers and
full-time employees include a medical reimbursement
plan, a dental plan, a vision care plan, a long-term
disability income plan and life insurance. No outside
director is provided these benefits.
<PAGE>
Remuneration of Executive Officers
The following table provides information concerning
remuneration of the five highest compensated
Executive Officers during 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> Annual compensation Long term compensation
Name and principal position Year Salary Bonus Other annual Securities All other
compensation underlying compensation
(A) options/SARs (C)
<S> (B)
R.D. Duggan, Chairman <C> <C> <C> <C> <C> <C>
1997 $420,000 --- $15,960 21,000 $38,074
1996 374,000 --- 16,540 21,000 33,972
1995 340,000 --- 16,299 21,000 27,200
J.C. Miller, President,
Chief Executive Officer
and Director
1997 258,000 --- 10,950 15,000 23,220
1996 233,000 --- 10,905 15,000 21,165
1995 215,000 --- 9,491 15,000 17,200
D.L. Krieger, Executive
Vice President
1997 157,000 $25,000 8,486 10,000 16,379
1996 145,000 25,000 8,365 10,000 15,442
1995 130,000 20,000 8,021 10,000 9,000
J.G. Barone, Executive
Vice President, Secretary
and Treasurer
1997 149,800 15,000 7,870 10,000 14,400
1996 139,800 10,000 6,974 10,000 13,163
1995 127,800 10,000 6,762 10,000 10,728
B.W. Salome, Executive Vice
President
1997 137,000 15,000 8,186 10,000 13,679
1996 130,000 10,000 8,585 10,000 12,708
1995 123,500 10,000 8,626 10,000 10,794
</TABLE>
Notes to Compensation Table
A. Includes expenses related to providing life, disability
and health insurance and any personal use of S&T cars.
B. The Stock Plan that was approved by the S&T Board
on December 21, 1992 and approved by the shareholders
on April 19, 1993 and an Amendment and Restatement of
the Stock Plan was approved by the S&T Board on
October 17, 1994 and approved by shareholders on April
17, 1995. Stock option grants were at exercise prices
of $26.25, $30.88 and $40.75 per share in 1995, 1996
and 1997, respectively. Options granted to other
Executive Officers as a group were 36,000 shares in
1995, 38,000 shares in 1996 and 41,000 shares in 1997.
C. Includes contributions by S&T Bank to the
401(k)/Thrift Plan and to nonqualified benefit plans
that were established in order that Executive Officers
not lose benefits which would normally have accrued in
qualified plans prior to the change in tax laws on
January 1, 1994 that lowered the compensation
calculation base to a current maximum of $160,000 and
added limitations related to highly compensated
employees.
<PAGE>
Agreements with Executive Officers
In 1985, S&T entered into an employment agreement with
its Chairman, President and Chief Executive Officer,
Robert D. Duggan, originally effective until December
31, 1995 and extended until December 31, 1997, in
consideration of a base salary of not less than
$150,000 per year. In return, Mr. Duggan agreed that,
for so long as he is receiving any payment under this
agreement, he will not engage in or have a financial
interest in any business competing with S&T. The
employment agreement entered into by S&T and Robert D.
Duggan also provides that if Mr. Duggan's employment
is terminated due to disability or retirement, he or
his spouse shall receive annually, for ten years, a
supplemental disability or supplemental retirement
benefit in an amount sufficient to provide fifty
percent (50%) of the average annual base salary he
received during the last three consecutive years of
his active employment with S&T. On October 17, 1994,
the employment agreement was amended and restated to
extend the term until December 31, 1997 and extend the
length of the disability or supplemental retirement
payout period from 10 years to the actual number of
whole years Mr. Duggan has been employed by S&T since
December 15, 1980. The supplemental disability or
supplemental retirement benefit of the employment
agreement is unfunded.
On January 2, 1998, Robert D. Duggan retired as
President and Chief Executive Officer. Mr. Duggan will
retain the title of Chairman of the Board and James C.
Miller was named President and Chief Executive
Officer.
Mr. Duggan intends to play an ongoing role for an
indefinite period of time with key customers and
prospective merger partners of S&T. Since these
services will be provided to S&T without compensation,
the S&T Compensation and Benefits Committee approved
ongoing benefits to Mr. Duggan that includes normal
medical coverage under S&T plans for himself and
spouse, life insurance policy of $100,000,
reimbursement of out of pocket expenses and club
memberships used for entertaining customers and
prospective merger partners. Mr. Duggan will also
maintain an office at the Corporate Headquarters of
S&T.
In December, 1994, S&T entered into change in control
agreements with the five highest compensated Executive
Officers of S&T: Messrs. Duggan, Miller, Salome,
Barone and Krieger. Each agreement provides that if
the executive is terminated within one year following
the occurrence of certain "changes in control" of S&T
or of S&T Bank (as defined in each agreement) that
were not preapproved by the S&T Board, or if the
executive voluntarily terminates his employment with
S&T under certain specified circumstances following a
change in control, the Executive Officer will be
entitled to receive a lump sum cash payment based on
the executive's salary immediately preceding the
change in control and to receive certain continuing
S&T employee benefits. In the case of Mr. Miller, the
lump sum cash payment would equal three times his
annual base salary immediately preceding the change in
control; for each of the other Executive Officers, the
cash payment would equal his annual base salary
immediately preceding the change in control. The
agreement with Mr. Duggan is no longer in effect
following his retirement on January 2, 1998.
<PAGE>
Board Compensation Committee Report on Executive
Compensation
Executive compensation decisions are made by the five
member Compensation and Benefits Committee (the
"Committee") of the S&T Board. Each member of the
Committee is a non-employee director. All decisions
relating to the compensation of Executive Officers are
reviewed by the S&T Board, except for decisions about
awards under the Stock Plan, which are made solely by
the Committee. The report set forth below is submitted
by Directors Levy (Chairman), Brice, Garges, Ruddock
and Toretti, in their capacity as Committee members,
addressing S&T's compensation policies for 1997 as
they affected Mr. Duggan, Chairman, President and
Chief Executive Officer, and the four other highest
compensated Executive Officers of S&T in 1997
(collectively "Senior Executives").
The Committee, in its executive compensation
decisions, considered overall corporate performance as
well as individual initiative and achievements. The
policy of the Committee is to provide competitive
levels of compensation that integrate pay with S&T's
performance goals, reward exceptional performance and
assist S&T in attracting and retaining qualified
executives. Compensation is set at levels that the
Committee believes to be consistent with others in the
industry that have similar responsibilities, with the
Senior Executives' actual compensation packages
increasingly being weighted toward programs contingent
upon S&T's level of long term (three years or greater)
performance. As a result, the Senior Executives'
actual compensation levels in any particular year may
be above or below those of S&T's competitors,
depending on S&T's performance. The Committee
typically examines salaries and performance levels of
a group of twelve to fifteen peer banks that it
selects for comparison with S&T based upon similar
size and geographic location. The Committee also
considers the SNL Securities Bank Performance Report
and the SNL Executive Compensation Review for
Commercial Banks. The peer banks utilized in this
review may or may not be included in the KBW 50 Index
or the S&P 500 Index as reflected in the Five-Year
Cumulative Total Return performance graph.
The Committee continues to endorse the position that
stock ownership by management and stock based
performance compensation arrangements are beneficial
in aligning management's and shareholders' interests.
The Stock Plan is considered to be an important
element in designing the compensation packages of S&T
because the Senior Executives can profit only if the
value of the S&T Common Stock increases.
The Committee's general approach in setting the Chief
Executive Officer's annual compensation is to seek to
be competitive with compensation paid to other chief
executive officers, with a similar scope of
responsibilities, and by other companies in the
industry based upon long term performance. The
Committee typically compares the chief executive officer
salary level and performance against the same twelve
to fifteen peer banks discussed above. The Committee
has also reviewed salary information compiled by both
regional and national benefits consultants for
comparison purposes.
Particular emphasis was placed upon S&T's success in
meeting its earnings per share and asset quality goals
in 1997, as well as the assessment of Mr. Duggan's
individual performance. The Committee also considered
Mr. Duggan's leadership in promoting the long term
strategic growth of S&T.
Mr. Duggan's cash compensation for 1997 increased over
the 1996 level by 12.3%. In setting Mr. Duggan's
compensation, the Committee considered S&T's current
year and long term performance against both local
competition and a national peer group of companies in
the same business.
In December 1997, the Committee granted Mr. Duggan
nonstatutory stock options for 21,000 shares of S&T
Common Stock with an exercise price equal to the
market price on the date of the grant. These options
are exercisable after six months and within ten years
of the date of the grant. The Committee believes that
this award together with last year's award of 21,000
shares will encourage long term performance and
promote management retention. As such, the Committee
does not typically award a cash bonus to the chief
executive officer. In addition to the options, Mr.
Duggan currently owns 24,783 shares of S&T Common
Stock. This significant interest in S&T's Common Stock
is considered to be beneficial to the common interests
of shareholders and management.
Submitted by the Compensation and Benefits Committee
of the S&T Bancorp, Inc. Board of Directors:
Samuel Levy (Chairman); Thomas Brice; Thomas Garges;
Parker Ruddock; Christine Toretti
<PAGE>
FIVE-YEAR CUMULATIVE TOTAL RETURN
S&T Bancorp, Inc.
S&P 500 Index and KBW 50 Index (A)
<TABLE>
<CAPTION>
Year Ended 1992 1993 1994 1995 1996 1997
December 31
<S> <C> <C> <C> <C> <C> <C>
STBA $100 $132 $155 $238 $247 $359
S&P 500 100 110 112 153 189 252
KBW 50 100 106 100 160 227 332
(A) The Keefe, Bruyette & Woods, Inc. (KBW) 50 is made
up of fifty of the nation's largest banking companies,
including all money center and most regional banks.
</TABLE>
Stock Option Plan Anticipated Benefits
The following table is presented to show proposed
benefits to the Chief Executive Officer and the four
most highly compensated Executive Officers. The
potential realizable value is calculated assuming
annual increases to the total return (market value
appreciation plus dividends) of S&T Common Stock of 5%
and 10%, respectively.
OPTION/SAR GRANTS IN LAST FISCAL YEAR (A)
<TABLE>
<CAPTION>
Individual Grants Potential realizable value
value at assumed annual
rates of stock price
appreciation for option term
Name Number of Percent of total Excercise Expiration 5% 10%
securities options/SARs price date
underlying granted to
options/SARs employees in
granted fiscal year
<S> <C> <C> <C> <C> <C> <C>
R.D. Duggan 21,000 11% $40.75 12/15/07 $546,728 $1,377,462
J.C. Miller 15,000 8 40.75 12/15/07 390,520 983,902
D.L. Krieger 10,000 5 40.75 12/15/07 260,347 655,934
J.G. Barone 10,000 5 40.75 12/15/07 260,347 655,934
B.W. Salome 10,000 5 40.75 12/15/07 260,347 655,934
(A) Options granted at an exercise price equal to
the market price on the date of the grant. These
options are exercisable after six months and within
ten years of the date of the grant.
</TABLE>
<PAGE>
The table below shows information about option
holdings for Executive Officers at year end on
an aggregate basis.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION/SAR VALUES(A)
<TABLE>
<CAPTION>
Number of securities Value of unexcercised
underlying unexcercised in-the-money
options/SARs at fiscal options/SARs at fiscal
year-end (B) year-end (B)
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
R.D. Duggan 94,000 21,000 $1,995,375 $52,500
J.C. Miller 60,000 15,000 1,221,375 37,500
D.L. Krieger 36,000 10,000 713,750 25,000
J.G. Barone 36,000 10,000 713,750 25,000
B.W. Salome 36,000 10,000 713,750 25,000
(A) No stock options were exercised in 1997.
(B) The numbers set forth in these columns represent
nonstatutory stock options. There have been no SARs
issued pursuant to the Stock Plan.
</TABLE>
Transactions with Management and Others
S&T Bank has made and expects to make in the future,
extensions of credit in the ordinary course of
business to certain directors and officers. These
loans are made on substantially the same terms,
including interest rates, collateral and repayment
terms, as those prevailing at the same time for
comparable transactions with others. Such loans did
not involve more than the normal risk of collectibility or
present unfavorable features.
On October 1, 1986, S&T Bank entered into an agreement
to lease, from Director Toretti and Michael Toretti as
trustees under an irrevocable trust, a building and
land which is used as S&T Bank's North Fourth Street
branch and operations center. The terms of the
agreement provide for payment of $10,000 per month for
the first five years and options to renew for four,
five year terms with rent for each option term to be
the rent from the previous term, plus five percent. On
October 1, 1996, S&T Bank exercised its second option
at $11,025 per month.
On August 1, 1992, S&T Bank entered into an agreement
to lease from S.W. Jack Drilling Company, controlled
by Director Toretti, a building used for the S&T Bank
Trust Department and other executive offices. The
terms of the agreement provide for monthly payments of
$6,500 for three years and the option to lease
additional space on the second floor with additional
successive terms of three years each, with rent for
each renewal option to be the rent from the previous
term plus five percent. On July 1, 1993, S&T Bank
exercised the option for the second floor space at the
S.W. Jack Building. On August 1, 1995, S&T Bank
exercised the first renewal option with a new,
combined monthly rent of $14,543.
On January 31, 1992, S&T Bank entered into a limited
partnership arrangement with RCL Partners, Inc. for
the construction of thirty apartments in Indiana,
Pennsylvania targeted for senior citizens. Total
investment by S&T Bank was $1,761,766 and entitled S&T
Bank to certain tax credits, tax depreciation benefits
and a share of cash flows under the Internal Revenue
Service Section 42 program. Director Delaney (and
affiliated parties) and Director Gatti (and affiliated
parties) each hold a one third interest in RCL
Partners, Inc.
Prior to the merger on May 2, 1997 with Peoples Bank
of Unity (Peoples), both S&T and Peoples leased branch
space in a shopping plaza owned by a company
controlled by Director Sampson. Monthly rental
expenses for the two locations were $3,449. Subsequent
to the merger, the two offices were combined and a
free standing drive-up teller and ATM facility
constructed. In December 1997 a new combined lease was
contracted. The lease agreement provided for a ten
year term, monthly rent of $6,750, annually adjusted
for changes in the consumer price index, and a ten
year renewal option.
During 1996, S&T Bank made payments for purchase of
goods and services from companies owned or controlled
by Director Brice and Director Spadafora for $218,929,
and $140,231, respectively.
Certain Business Relationships
During 1997, S&T Bank acquired automobile loans on a
third party basis from companies owned by Director
Delaney and from companies owned by Director
Spadafora. These loans were acquired on substantially
the same terms as those prevailing at the same time
for comparable transactions with others.
<PAGE>
Compensation Committee Interlocks and Insider
Participation
Regulations require the disclosure of any related
party transactions with members of the Compensation
Committee. During 1997, S&T Bank made payments of
$218,929 to a company owned by Director Brice for the
purchase of furniture and other equipment, and
payments of $339,184 to Director Toretti, and
affiliates, for the lease of operations, branch and
administrative facilities. S&T Bank has made and
expects to make in the future, extensions of credit in
the ordinary course of business to members of the
Compensation Committee. These loans are made on
substantially the same terms, including interest
rates, collateral and repayment terms, as those
prevailing at the same time for comparable
transactions with others. Such loans did not involve
more than normal risk of collectibility or present
unfavorable features.
Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires S&T's
directors and Executive Officers, and persons who own
more than ten percent of S&T's stock, to report to the
Securities and Exchange Commission ("SEC") certain of
their transactions with respect to S&T's stock. The
SEC reporting rules require that changes in beneficial
ownership generally be reported on Form 4 within ten
days of the month in which the change occurs, except
certain types of changes may be reported on a Form 5
within 45 days of the end of the year in which the
change occurs. Form 3 must be filed within 10 days of
the event when a director, Executive Officer or person
who owns more than ten percent of S&T's stock becomes
subject to Section 16(a) of the Exchange Act
compliance. In 1997, Directors Grant, Sampson and
Jones were late filing Form 3 following their
appointment to the S&T Board of Directors upon
consummation of the merger with Peoples; Director Levy
was late filing one Form 4, reflecting one
transaction.
<PAGE>
PROPOSAL II---AMENDMENT TO S&T's ARTICLES OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF S&T COMMON STOCK
At a meeting held on February 16, 1998, the Board of
Directors of S&T approved a resolution declaring it
advisable to amend S&T's Articles of Incorporation to
increase the number of S&T's authorized Common Stock
and directing that the amendment be submitted to
shareholders for their approval at this Annual
Meeting. As of March 2, 1998, _____ shares of S&T
Common Stock were issued and outstanding, _____ shares
were held in treasury, and _____ shares were for
issuance under various of S&T's employee benefit
plans. The Board of Directors believes that the
amendment is desirable because it would provide S&T
with flexibility in issuing shares and managing S&T's
capital structure.
S&T may use authorized and unissued shares of S&T
Common Stock for various corporate purposes,
including, but not limited to, possible future
financing and acquisition transactions, possible
recapitalizations through stock splits or stock
dividends, issuances of additional stock options or
awards, and other corporate purposes. Authorized and
unissued shares of S&T Common Stock may be issued for
the foregoing purposes by the Board without further
shareholder action unless the issuance is in
connection with a transaction for which shareholder
approval is otherwise required under S&T's Articles
of Incorporation, applicable law, regulation or
agreement.
The issuance of the additional shares of S&T Common
Stock proposed for authorization may have the effect
of diluting existing shareholder earnings per share,
book value per share and voting power. In addition,
issuance of the shares of S&T Common Stock proposed
for authorization may be used to make a change in
control of S&T more difficult or costly by diluting
stock ownership of persons seeking to obtain control
of S&T permitting the Board to issue shares to
purchasers favorable to S&T in opposing an effort to
obtain control of S&T.
S&T has no present intention to issue the additional
shares of S&T Common Stock proposed for authorization.
If approved by shareholders, the provision of S&T's
Articles of Incorporation relating to the total
authorized capital stock of S&T would be amended to
read as follows:
Total Number of Authorized Shares. The Corporation
shall be authorized to issue 50,000,000 shares of
common stock, $2.50 par value per share, and
10,000,000 shares of preferred stock, without par
value.
THE S&T BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO S&T's ARTICLES OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF S&T COMMON
STOCK.
PROPOSAL III---RATIFICATION OF INDEPENDENT AUDITORS
The S&T Board has selected Ernst & Young LLP,
independent public accountants, as the auditors for
S&T for the year ending December 31, 1998. At the
Annual Meeting, shareholders will vote upon a proposal
to ratify the selection of the firm as auditors.
The financial statements of S&T and its subsidiaries
for the years ended December 31, 1997, 1996, and 1995
were audited by Ernst & Young LLP. Other services
rendered during 1997 by Ernst & Young LLP included tax
preparation and tax planning and consultations and
services to S&T in connection with filings with the
SEC pursuant to Section 12 of the Exchange Act. It is
expected that representatives of Ernst & Young LLP
will be present at the Annual Meeting and that they
will have an opportunity to make statements if they so
desire and will be available to respond to appropriate
questions.
An affirmative vote of a majority of the shares of S&T
Common Stock represented in person or by proxy at the
Annual Meeting is necessary for ratification of the
appointment of Ernst & Young LLP as auditors. The S&T
Board recommends that you vote "FOR" ratifying the
selection of Ernst & Young LLP. No determination has
been made as to what action the S&T Board would take
if the shareholders do not ratify the appointment.
THE S&T BOARD RECOMMENDS A VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG LLP AS AUDITORS.
<PAGE>
SHAREHOLDER PROPOSALS
Any proposal which a shareholder of S&T intends to
present at the 1998 Annual Meeting of Shareholders of
S&T must be received in writing by the Secretary of
S&T at S&T's main office, 800 Philadelphia Street,
Indiana, Pennsylvania, on or before November 22, 1998.
If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the Exchange Act the
proposal will be included in S&T's proxy statement and
proxy form relating to such meeting.
OTHER MATTERS
Management knows of no other matters to be brought
before the Annual Meeting. However, should any other
matter requiring a vote of the shareholders properly
come before the meeting, the persons named in the
enclosed proxy will vote the shares represented by the
proxies on such matter as determined by a majority of
the S&T Board.
By Order of the Board of Directors,
James G. Barone
Secretary
THIS PROXY STATEMENT IS ACCOMPANIED BY S&T'S 1997
ANNUAL REPORT. UPON WRITTEN REQUEST TO THE SECRETARY
OF S&T, 800 PHILADELPHIA STREET, INDIANA, PENNSYLVANIA
15701, BY ANY SHAREHOLDER WHOSE PROXY IS SOLICITED
HEREBY, S&T WILL FURNISH A COPY OF ITS 1997 ANNUAL
REPORT ON FORM 10-K TO THE SEC, TOGETHER WITH
FINANCIAL STATEMENTS AND SCHEDULES THERETO, WITHOUT
CHARGE TO THE SHAREHOLDER REQUESTING SAME.
March 16, 1998
<PAGE>
REVOCABLE PROXY
S&T BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
April 20, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Ruth B. Wells, James
B. George and Delbert M. Baker or any successors, with
full powers of substitution, to act as attorneys and
proxies for the undersigned to vote all shares of the
common stock of S&T Bancorp, Inc. ("S&T") par value
$2.50 per share, which the undersigned is entitled to
vote at the Annual Meeting of Shareholders (the
"Meeting"), to be held at the S&T Training and Support
Center, located at 355 North Fifth Street, Indiana,
Pennsylvania, on April 20, 1998, at 10:00 a.m. Eastern
Standard Time and at any and all adjournments thereof,
as indicated on the reverse hereof.
Should the undersigned be present and elect to vote at
the Meeting or at any adjournment thereof and after
notification to the Secretary of S&T at the Meeting of
the shareholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be
deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from S&T prior to
execution of this proxy of the Notice of Meeting and
the Proxy Statement. The undersigned hereby revokes
any and all proxies heretofore given, with respect to
the undersigned's shares of S&T Common Stock.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE
OTHER SIDE)
> FOLD AND DETACH HERE >
<PAGE>
Please mark your votes as indicated in this example
1. Election of Directors for three year term. The
nominees for the Board of Directors are:
Thomas A. Brice, James L. Carino, Thomas W. Garges,
Jr., Jeffrey D. Grube, Joseph A. Kirk, James C.
Miller.
(Authority to vote for any nominee may be withheld by
striking a line through the nominee's name above.)
FOR WITHHOLD AUTHORITY
all nominees listed above to vote for all nominees listed above
(except as marked to the contrary)
2. To consider and vote upon a proposal to adopt an
amendment to S&T's Articles of Incorporation
increasing the number of authorized shares of S&T
Common Stock from 25,000,000 shares to 50,000,000, par
value $2.50.
FOR AGAINST ABSTAIN
3. To ratify the appointment of Ernst & Young LLP as
auditors for 1998.
FOR AGAINST ABSTAIN
4. To transact such other business as may properly
come before the meeting or any adjournment thereof.
Only shareholders of record as of the close of
business on March 2, 1998 are entitled to notice of
and to vote at such meeting or any adjournment
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED
FOR THE NOMINEES LISTED IN PROPOSAL 1, AND FOR
PROPOSALS 2 AND 3. IF ANY OTHER BUSINESS IS PRESENTED
AT THE MEETING, INCLUDING MATTERS RELATING TO THE
CONDUCT OF THE MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN ACCORDANCE WITH THE
DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS.
AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF
NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
Please sign exactly as your name appears on this card.
When signing as attorney, executor, administrator,
trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
Signature(s)___________________Signature(s)__________
_________Date______________, 1998
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
> FOLD AND DETACH HERE >
<PAGE>
